Los Angeles Bamboo Bicycles
Business Plan
Project ECHO/ UCLA Anderson School of Management
Film and Theatre Arts Charter High School:
Anderson Mentors: Awand Mehta, Aditya Khargonekar
1
Executive Summary-
Los Angeles Bamboo Bicycles is a student run business that will stir up change within
L.A. to advocate for better road conditions and priority to cyclists. As a business, our
main product will be to build and sale bamboo bicycles.
Table of Contents
Business Description . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . pg. 3-4
Industry and Marketing Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .pg. 4-5
Marketing Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .pg. 6-7
Operations Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . pg. 7-10
Management Team . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .pg.10-11
Financial Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . pg. 11-14
Appendix 1: Central and South Los Angeles Neighborhoods . . . . . . . . . . . . . pg. 14-16
Appendix 2: Bicycle Master Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . pg. 16-17
2
Business DescriptionLos Angeles has the perfect climate for cycling. You can ride from the city to the
beaches or even to the hills. Yet, Los Angeles is not completely a bicycle-friendly
environment. Many of Los Angeles’s streets are not fit for cycling, especially around the
South region of Los Angeles. Besides the road conditions, drivers around the city do not
respect cyclists that ride on the side of the streets where they are rightfully supposed to.
Our goal as a business/organization is to change this by selling bicycles, offering
community rides, bicycle maintenance, and bicycle safety workshops.
The objective of Los Angeles Bamboo Bicycle is to stir up change within Los Angeles to
advocate for better road conditions and priority to cyclists. This will be a student-ran
business that demonstrates that a young generation wants to impact the community.
Our main product will be customizable bamboo bicycle frames. These bamboo bicycle
frames will be customized to the customer’s body measurements. You might be
thinking, “Bamboo?!” and, of course, the same reaction has been seen on multiple
people when the idea is presented to them. But, it is true, as fictional as it may seem to
you or not, bamboo is a strong material. Bamboo has comparable qualities to light steel
and to carbon fiber. Bamboo is a natural, sustainable material that has tensile strength
mimicking light steel. Bamboo is fairly light, compared to other bicycle materials, other
than carbon fiber. A bamboo bicycle frame comes close to an aluminum frame ranging
from 4.5 to 6.5 pounds, yet, varies on the customer’s requirements. This offers a more
affordable option to carbon fiber frames. Bamboo has multiple beneficial aspects,
weight being one of them but another benefit is its flexibility. Bamboo flexes yet it does
not brake letting it absorb more shock than other frames. This is what we want to offer
to our customers, an affordable, light, and durable bicycle that has this attractive texture
to it.
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As an uprising business we are seeking funding to push start the preliminary stage of
the business. The preliminary stage is training; the components pertaining to this stage
are maintenance, bicycle safety, community bike planning, finance, operations, and
management. Most of the physical training like bicycle maintenance, bicycle safety, and
community bike planning can be gained through voluntary work with other
organizations. For the construction of the bamboo frames, we will need to order the
material from our partnering source, Bamboo Bike Studio. The business staff will require
training in building these bicycles in order to be able to sell high-quality bicycle to our
customers.
Industry and Market AnalysisLos Angeles Bamboo Bicycles aims to be a community business that focuses on
Central and South Los Angeles. We will offer high-quality bamboo bicycles that are fit to
ride around the city of Los Angeles. Many Angelinos have already turned to bicycling as
their daily source of transportation. In 2009 the Los Angeles Bicycle Coalition did a
bicycle count over a period of 2 days. Over those two days they counted 14,222
cyclists. In 2011 they conducted the same bicycle count over two days. At the end of
these two days they counted 15,111 cyclists. That is a 6% increase with over 2 years.
Our business will focus on Central and South Los Angeles which have a wide range in
ethnicity, income, and age. Within these communities, several local bicycle shops are
within a five-mile radius or less (appendix 1)
The bicycle community is rapidly expanding and the demand for durable efficient bikes
is expanding with it. Currently, there are no other bamboo bike distributors within our
community; this is why our location would bring us an advantage in this industry.
There has been a shift in the market, with consumers seeking natural and sustainable
products. With the consistent increase in gasoline prices, it has become harder to be
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able to pay the cost of driving; therefore, customers have started to look for more
budget-friendly alternatives.
On February 28, 2012, Los Angeles County approved the Los Angeles County Bicycle
Master Plan. This plan includes adding 832 miles of new bicycle lanes to Los Angeles
as well as spending $330 million in funding for the next 20 years to improve access to,
and the safety of bicycle lanes. (Appendix 1)
Creating this business will help students have an additional option for transportation
aside from the public bus or having parents driving them to school. Out of 135 students
at our school, roughly 85%, or 114 students come on the public bus while the other
15%, 21 students are dropped off by their parents. These numbers vary slightly
depending on the day. (Appendix 2)
Having a bamboo bicycle as a citizen of Los Angeles, would be more beneficial than
owning a metal or aluminum bicycle because bamboo is a strong, eco-friendly material.
Bamboo has comparable qualities to light steel and carbon fiber. It is a natural,
sustainable material that has tensile strength mimicking light steel. Bamboo is fairly light
compared to other bicycle materials. A bamboo bicycle frame has a similar weight to an
aluminum frame ranging from 4.5 to 6.5 pounds yet varies on the customer’s
requirements. This offers a more affordable option to carbon fiber frames.
Bamboo has multiple beneficial aspects, weight being one of them but another benefit is
its flexibility. Bamboo flexes, yet it does not break, allowing it to absorb more shock than
other frames. This is what we want to offer to our customers, an affordable, light, and
durable bicycle that has an attractive texture to it.
5
Marketing Plan-
The bicycle community in South Los Angeles is constantly growing, and there are a lot
of cyclists who would want a light and fast bicycle to ride around their community.
Our main marketing strategy is to get people’s attention to get them to buy our bicycles
and to attract them to our bicycle shop. The growing popularity of cyclists in Los
Angeles means a larger amount of people interested in our products and what we are
doing. One of our marketing strategies is handing out flyers, spoke cards, and stickers.
We will give customers a complementary sticker and spoke card with all purchases.
Our goal for this strategy is to bring in new customers. The flyers will show them our
products and this will get people’s attention because the spoke cards go on the rim
where it can easily catch the attention of potential customers. This will be our business
card because it will contain our contact information. We will also have our friends from
other schools as promoters. They will be able to hand out flyers as well as we will. They
will be like our promoters. Someone we can call our extra hand. We will also go and ask
for permission to set up flyers hand them out at the nearby schools.
Another marketing strategy is Social Media. Our goal for that strategy is to keep people
in touch in what we are promoting up to date with our promotions. This will keep
people’s attention and bring them in.
Another strategy is to have partnerships with local bicycle shops. Our goal for this
strategy is to bring in more through referrals. Whenever someone asks for one of our
products they will refer us. In exchange we will refer customers to the shop if they ask
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for the products the referring shops have. We will maintain our customers loyalty by
offering services (such as Bicycle Maintenances, Tips, information on bicycle safety,
rides, specials). We will also provide free products ( such as Bicycle lights, Bicycle
Straps, Bicycle Cages, and Adaptors etc.)
Another thing we will do is to let people test ride the bicycle if they have any concerns
about the bicycle braking in any way. We will make it clear in all promotions that when
you buy a bicycle you’re not only helping yourself you’re helping your community and
supporting education because we are a student run business in South Central and our
goal is to build our business so we can grow as students and as future business
leaders.
Our next step will be to focus on trying to find partnerships with other bicycle shops that
provide us free or discounted items that can help us in our business. We will kindly
introduce ourselves as High school students and offer what we can provide, such as
references, in hope that they can refer us and also have a partnership.
Operations PlanLos Angeles Bamboo Bicycles is a student run business that will sell bicycles and
provide bicycle services to Los Angeles cyclists. The business is also a learning
experience that allows customers and cyclists to learn something new about their
bicycles, the cycling experience and or/other products we provide.
The key components of the business are to sell bamboo frames/bicycles, inform the
community about bicycle safety, and assist local cyclists via repair services, organized
community rides and other initiatives. The bicycle frame is our main product and is
made of sustainable and durable bamboo. The bamboo frame is joined together with
carbon fiber strips and epoxy resin to create solid joint lugs. The final product
possesses the tensile strength of steel, at a fraction of the weight, and offers
unparalleled shock absorption for a smooth and safe ride.
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We want to bond with the “established” local cycling community because we ride the
same streets as they do.
We will provide repair services to the cyclists of the
community and also train them to service their own equipment. We will educate local
cyclists about bicycle maintenance and safety as well. The business will also sponsor
community bicycle rides to explore the city, with one aim to be the promotion of historic
sites within our section of town. Profits from Los Angeles Bamboo Bicycles will help
create college scholarships for graduates of our school.
We will operate our business from our school. The following section will discuss how the
website and store will work together to offer the customer a variety of quality options.
They engage us onlineThe customers discover us via various browsers and/or apps, learning our business
location, our hours, and the products we sell. This allows them the flexibility of working
with us either predominantly online or in-person. They’ll choose the type of product they
want, and how (if at all) they want it customized. Alternatively, the website leads them
directly to the store, where they will either find the bicycle that attracts and fits them
best, or begin the process of customization. Another major decision is whether they
want us to build the bicycle to suit them, or whether they would prefer to build it
themselves, under our guidance and supervision.
Once these determinations have
been made, they either place a deposit or pay the complete amount.
They come directly to the storeThe Customer calls the store with questions about the bicycles and how much they
cost, or physically enters the space as their initial contact. Once they’re on-site, the
range of options is pretty much the same as detailed above.
How frames and bicycles are built:
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Bicycles will be built in the parking lot of Film and Theatre Arts Charter High School.
The operator of bicycle building is the entire team, which will start the project. Our shop
will be focusing on building single speed and fixed-gear bicycles. The bicycle will be
built custom made to the measurements of the rider’s height, arm length, inseam, and
other measurements.
Basic steps to building the Bamboo bicycle:
1. Measure the height of the main bicycle rider (inseam, arm length, leg length,
torso…)
2. Take the data and insert it into the CAD program along with the rider’s needs
(“fixed gear” vs. “single speed,” etc…) to produce the frame geometry and
measurements. (This information is sent to Bamboo Bike Studio, which then
create the frame design and cut the bamboo to the measurement to the customer
needs)
3. Prepare the jig, with Balsa wood blocks standing in the four lugs in the places
where bamboo will join with bamboo.(1 hour)
4. Rough up the ends of the bamboo pieces, so that the resin- coated fiberglass
and carbon fiber will adhere to them. (1 hour)
5. Place bamboo pieces, then track them together using strips of fiberglass mesh
dipped in resin. (1.5 hours)
6. Shape the balsa blocks with assorted files, sandpaper, and soft mesh. (3-4
hours) This is the last step for the end of the last step.
7. Wind strips of resin-coated Carbon Fiber ribbon (over and over and over in
various patterns) around the “lug” areas, one time. (6 hours)
8. Wrap the wet lugs tightly with the tape and allow them dry overnight. (2 hours)
This is the last step for the second day.
9. Gently and painstakingly remove excess resin and file down lugs to ensure
continuity of shape and maximum strength. (4-5 hours)
10. Finely sand the lugs and remove all remnants of tape (2 hours)
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11. Place first coat of Tung Oil on frame to begin process of weather-proofing. (30
min.)
12. Take Frame off Jig and assemble with components. (1.5 hours) this is the last
step and the bicycle I finalized.
Management TeamThe team is composed of students from Film and Theatre Arts Charter High School.
These students take an interest in cycling, whether it’s a source of transportation,
fitness, or performance. Besides being passionate about bicycles, each student has an
interest in the business world.
Student 1, Chief Executive Officer
1 is in the twelfth grade and rides his bicycle to school. His passion is architecture, art,
and bicycles. He currently interns at Morphosis Architects. His architecture project is
creating a bicycle rack for the school.
Student 2, Co-Chief Executive Officer
2 is in the ninth grade. She lives in Los Angeles and loves riding bicycles. She has a
passion for business and is aiming to open her own restaurant. She is taking advantage
of this opportunity to learn how to start up a business later on in life.
Student 3, Chief Financial Officer
3 is in the ninth grade. He lives in Los Angeles and is excited about this business
because he wants to learn how to work on bicycles. He loves to play guitar as a hobby.
Student 4, Chief Operating Officer
4 is in the ninth grade. He lives in Los Angeles and loves building and painting bicycles
from scratch. He loves rebuilding vintage bicycles and restoring them to their original
state.
He
also
participates
on
bicycle
rides
around
the
city.
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Student 5, Co-Chief Operating Officer
5 is in the ninth grade. He lives in Los Angeles and loves bicycles because he finds
bicycles to be human powered vehicles that are eco-friendly. He loves to ride and skate
but
biking
is
his
passion.
He
wants
to
pursue
professional
cycling.
Student 6, Chief Marketing Officer
6 is in the ninth grade. He lives in Los Angeles and loves bicycles because they let him
get around without a car. He love building and fixing them. He finds them interesting on
how every part comes together to make the bike ride the way it does.
Student 7, Co-Chief Marketing Officer
7 is in the ninth grade. He lives in Los Angeles and loves building, fixing and
maintaining bicycles.
Financial PlanWe plan to spend $700 as our fixed cost on the “All Inclusive Kit.” The kit itself includes the most
important piece to our operation, which is the jig. The jig acts as a workstation and holds the
bamboo tubing together so the builder can begin to assemble the frame. We plan to buy a new
jig, which is $100, every year. This will add to our variable cost each year, but, will increase
production rate of the bamboo frames. The chart below explains the content of the “All Inclusive
Kit.”
We offer two options to our customers, they are completed frames or completed bicycles . The
frame is for someone who has the tools and parts needed for the building, the bike is for the
rider who wants new parts or doesn’t have the parts needed, it will cost us about $480, due to
parts and labor, to make a completed frame. A completed bike however, will cost us $1,420,
due to parts and labor. Please see Chart # 3 for details on the cost of parts. For labor, we
estimate 16 hours for a completed frame, and 32 hours for a completed bicycle, at $10/hour.
Chart #1
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All
Inclusive Price (each) Quantity
Total cost
Kit
Jig & bamboo tools $272
1 set
$272
Free
1 set
$0
$110
1 set
$110
2x4 MDF board
$2
1
$4
Drill
LABB Owned
1
$0
¼” & 3/8” drill bits
LABB Owned
1
$0
Hammer
LABB Owned
1
$0
Adjustable
LABB Owned
1
$0
& resin
Instructional
videos
Dendrocalamus
Strictus (bamboo)
Wrenches
Other Cost
$306
The “other” cost explained in the chart above is made up shipping and handling cost. It
is basically the labor cost for the Bamboo Bike Studio to cut the bamboo to specific
measurements.
Our Variable cost is made up of the “Re-up Kit”, which is a kit containing the parts
specifically needed to produce another bamboo frame. The kit itself cost $300 but does
not include a jig. The rest of our variable cost consists of the bicycle parts needed to
make a bicycle able to ride. Explained in the charts below is the “Re-up Kit” and the
specific parts needed.
Chart #2
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Re-up Kit
Price (each) Quantity
Bamboo tools & $172
1 set
$172
Free
1 set
$0
$110
1 set
$110
resin
Instructional
videos
Dendrocalamus
Strictus (bamboo)
Chart #3
Part
Prices For Individual Parts (Stock Single-Speed Bike)
Individual Total
Price
Piece
Piece
(total)
Handle Bars
$20
2
$40
Neck Stem
$25
2
$50
Fork
$25
2
$50
Hand Grips
$10
2
$20
Seat
$15
2
$30
Spacers
$1
5-10
$10
Seat Post
$15
2
$30
Crank
$45
2
$90
Pedals
$20
2
$40
Chain
$12
2
$24
Rims
$120(set of two)
2
$240
Tires
$20(set of two)
2
$40
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Inner Tubes
$6
2
$12
Lights
$7
4
$14
Helmet
$20
2
$40
Bottom
$25
2
$50
Bracket
Total
$780
We plan to sell a completed frame for $550, Our profit is $70. We plan to sell 35 frames
for the first year of buisness and later progress to 50 or more frames a year. We also
plan to sell a completed bike for $1600, our profit will be $180. We plan to sell at least
20 bicycles for our first year, and slowly move towards selling 40 completed bikes. Here
is an estimation of our financial projetions.
Financial Projections:
Chart #4
2012
2013
2014
# Of bikes
20 bicycles
40 bicycles
60 bikes
80 bikes
# Of frames
35 frames
50 frames
65 frames
80 frames
Price/bicycle $1,600
$1,600
$1,600
$1,600
Price/frame
$550
$550
$550
$550
Revenue
$51,250
$91,500
$131,750
$172,000
Variable
$1,100
$1,100
$1,100
$1,100
cost/bike
$320
$320
$320
$320
Fixed cost
$700
$100
$100
$100
Total cost
$45,200
$80,800
$116,400
$152,000
Profit
$6,050
$10,700
$15,350
$20,000
2015
Cost/frame
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Appendix 1: “Central Los Angeles’s population is 836,638 according to the U.S.
Census” Source from http://projects.latimes.com/mapping-la/neighborhoods/
Central Los Angeles’s population is 836,638 according to the U.S. Census.
Ethnicity:
The
predominate
Latinos/Hispanics and
market
within
this
neighborhood
consists
of
Caucasians in this community.
Latino/Hispanic- 46%
Caucasian- 26%
Asian- 16%
African American- 8%
Other- 4%
Income: The majority of residents in this community have an income of 20,000 or less.
0-$20,000: 122,329
$21,000-$40,000: 90,059
$41,000-$60,000: 47,566
$61,000-$125,000: 51,960
Age: Our target age is from 14-49 years old.
11-18yrs: 71,346
19-34yrs: 259,304
35-49yrs: 199,964
South Los Angeles’s population is 749,453 according to the U.S. Census.
Ethnicity:
The
predominate
market
within
this
neighborhood
consists
of
Latinos/Hispanics and Caucasians in this community.
Latino/Hispanic- 57%
African American- 38%
Caucasian- 2%
Asian- 2%
15
Other- 1%
Income: The majority of residents in this community have an income of 20,000 or less.
0-$20,000: 85,535
$21,000-$40,000: 59,360
$41,000-$60,000: 30,450
$61,000-$125,000: 5,491
Age: Our target age is from 14-49 years old.
11-18yrs: 107,308
19-34yrs: 196,714
35-49yrs:
Appendix 2: “832 Miles of New Bikeways Coming to L.A. County, Thanks to Updated
Bicycle Master Plan” Source from
http://laist.com/2012/02/28/832_miles_of_new_bikeways_coming_to.php
The Los Angeles County Bicycle Master Plan has been updated and approved today,
and includes plans for 832 miles of new bikeways, as well as over $330 million in
funding to be spent over 20 years on improving access to and the safety of bicycle
transit in L.A.
The Master Plan, in development since 2009, was released to the public in October
2011. According to a release issued by Los Angeles County Supervisor Don Knabe
today, those funds will be used to improve "the interconnectedness of bike corridors and
develop support facilities that encourage cycling, through additional bike lanes, signage,
traffic calming measures and safety and educational programs."
There was some concern about that funding, though, and Supervisor Michael
Antonovich not only raised fears about sourcing funds, but also abstained from voting.
"Monies will come from various Department of Public Works funds, including local return
funds raised through Proposition C and Measure R," explains City News Service.
The plan passed by a 4-0 vote.
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More thoughts from Knabe:
“The updated Plan combines the vision of local communities and the County for the
development of opportunities to increase cycling as a viable transit option for residents.
While Los Angeles is known as a car culture, voters have told us time and again that
they want options - be it public transit or bicycles - as a way to alleviate traffic
congestion, improve air quality and enhance the health and quality-of-life in our
communities.”
Through the Bicycle Master Plan, Los Angeles County will invest over $330 million over
20 years to increase the interconnectedness of bike corridors and develop support
facilities that encourage cycling, through additional bike lanes, signage, traffic calming
measures and safety and educational programs.
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